Archive for July, 2015

… Brian Hamburger, CEO of MarketCounsel, says that with the judge’s ruling “in the same way that driving is a privilege and not a right, CFP certificants should now be on notice that, when they click through those terms and conditions, they hand a set of keys to their career over to the CFP Board.” He adds, “It’s those terms and conditions of certification to which certificants agree to comply with the CFP Board’s standards of professional conduct, including its code of ethics and professional responsibility, rules of conduct, practice standards, and disciplinary rules and procedures. If certificants don’t agree or understand with them, their recourse is to give up their use of the CFP mark well before any inquiry or dispute ensues. And that’s because nobody, not even a federal court, is going to second-guess the CFP Board’s decisions so long as they follow their own, private due process.”

“I don’t think that CFP certificants can find much to like in the decision to grant the CFP Board broad, quasi-regulatory authority that is not reviewable by a court of law,” says Brian Hamburger, founder of MarketCounsel, a New Jersey law firm that advises RIAs on compliance and other issues and who has represented clients in cases against the CFP Board. Hamburger emphasized that he has not yet read the judge’s decision.

Brian Hamburger, president of Market Counsel, agreed that prospects for the rule are dim. “I don’t think they have industry or consumer-group consensus,” he said. “I don’t think they have political backing. There’s almost no likelihood that this rule will be finalized as written.”

“Every change within the advisor industry seems to be cataclysmic; it seems the sky is falling. And what came to be is much less than that—somewhat of a non-event,” says Brian Hamburger, founder of MarketCounsel, the New Jersey law firm that advises RIAs on compliance and other issues. The firm is handling about a dozen cases of RIAs who have run afoul of state regulators since their transition from the SEC. “We’re not hitting the panic button,” he says.

With the movement of 2,100 RIAs to state oversight, the SEC’s record appears to have improved, but modestly. The agency reported 1,150 examinations of advisors in fiscal 2014, up from 964 a year earlier. (Hamburger is skeptical of the improvement, questioning what is considered an “exam.”)

Hamburger argues that individual rules taken by themselves are not complicating the lives of mid-level advisors, but incrementally they add up. The burden of struggling with new and unfamiliar regulatory rules has been placed on advisors who can afford it less than their larger counterparts under SEC scrutiny, he adds. “The change is not taking place amongst those that have dedicated compliance departments and professionals at their beck and call. This is taking place among people who run small businesses,” he says.